Eli Lilly to acquire AtaiBeckley in US$2.8B deal to advance psychedelic treatments for depression

USA— Eli Lilly has agreed to acquire psychedelic drug developer AtaiBeckley in a deal valued at US$2.8 billion upfront, strengthening the pharmaceutical giant’s presence in the rapidly evolving mental health market.

The acquisition reflects Lilly’s growing interest in psychedelic-based therapies for difficult-to-treat psychiatric disorders and expands its neuroscience portfolio as competition intensifies in the treatment-resistant depression (TRD) space.

The agreement also positions Lilly alongside companies such as Johnson & Johnson (J&J), which has already established a foothold in the market with its approved TRD therapy, Spravato.

Lilly offers premium deal with milestone payments

Under the terms of the agreement, Lilly will pay US$6.75 per share in cash, representing a 40% premium over AtaiBeckley’s 30-day volume-weighted average share price.

The company’s stock closed at US$5.36 per share on Wednesday before the announcement.

In addition to the upfront payment, AtaiBeckley shareholders could receive up to US$2.50 per share through contingent value rights linked to future development and regulatory milestones.

These payments could increase the overall value of the acquisition by approximately US$1 billion, bringing the potential total transaction value to US$3.8 billion.

Lilly has tied US$1 per share to the initiation of Phase III clinical trials for VLS-01, a buccal film formulation of dimethyltryptamine (DMT).

Another US$1 per share will become payable if VLS-01 secures U.S. regulatory approval and receives the necessary drug rescheduling.

The remaining US$0.50 per share depends on the approval and rescheduling of BPL-003.

BPL-003 shows promise for treatment-resistant depression

AtaiBeckley’s lead investigational therapy, BPL-003, is a fast-acting intranasal formulation of 5-MeO-DMT, a psychedelic compound naturally found in certain plants and animals.

The compound acts on serotonin receptors in the brain, which play a central role in regulating mood and emotional wellbeing.

The candidate recently delivered positive results in a Phase IIb clinical trial involving patients with treatment-resistant depression.

Participants experienced statistically significant improvements in depressive symptoms as early as two days after treatment, and those benefits remained evident through Day 57 of the study.

Another pipeline asset, VLS-01, is an oral buccal film formulation of DMT that is also being developed for patients with treatment-resistant depression.

Competing in the expanding psychedelic therapy market

If both development programmes achieve their clinical and regulatory milestones, Lilly will strengthen its position in the emerging psychedelic medicine sector and compete more directly with J&J in the treatment-resistant depression market.

Currently, Spravato, J&J’s ketamine-derived nasal spray, is one of only two therapies approved by the U.S. Food and Drug Administration (FDA) specifically for treatment-resistant depression.

The other approved option combines olanzapine and fluoxetine hydrochloride, two medicines that are also available separately as generic products.

Unlike Spravato, which requires patients to remain under medical supervision for at least two hours because of its potential dissociative effects, BPL-003 demonstrated a shorter post-treatment recovery period during clinical testing.

Most participants in the Phase IIb study were ready for discharge within 90 minutes, suggesting the therapy could integrate more efficiently into existing treatment centres while reducing the burden on healthcare providers.

Speaking during an investor event in March, AtaiBeckley Chief Executive Officer Srinivas Rao said the company designed BPL-003 by building on lessons learned from earlier interventional treatments, including Spravato, with the goal of maintaining or improving effectiveness while simplifying treatment delivery.

Analysts at BMO Capital Markets welcomed the proposed acquisition, saying it would provide Lilly with differentiated exposure in psychiatry while supporting the company’s broader strategy of diversifying beyond its core cardiometabolic business.